What causes financial anxiety – and what can you do about it?
May 18, 2023 - 3 minutes read
Posted by Claire Parker
When we think of anxiety about money, we often picture someone struggling to make ends meet or living paycheck to paycheck. However, it’s important to acknowledge that even when you have a good income, you may still experience anxiety about your money.
In this blog post, we explore some of the causes of anxiety about money that most people experience at some point in their lives.
Money is one of the most powerful tools in our lives. It can provide us with freedom, security, and access to the most wonderful opportunities. However, even when we have a good income, the fear of losing it can still create anxiety. People who have money are not immune to financial worries.
Fear of loss.
One of the main reasons why we worry about money is the fear of losing it. The economy can be unpredictable, and even the savviest of investors can suffer losses. Economic downturns, changes in government policies and taxation, and unexpected events like pandemics can all impact the value of investments, leading toa feeling of insecurity and lack of control.
It’s important to understand your fears around loss of money as this will help inform the right investment strategy for you. Often, people take unnecessary investment risks when instead a more conservative approach which prioritises protecting money rather than growing it is the most sensible, worry-reducing option.
Upkeep of lifestyle.
Another cause of insecurity centres on the potential loss of lifestyle over the long-term, especially when you wish to scale back your work or retire fully. This anxiety can fuel the building of a successful career or business – so acts as a positive in many ways – but can also cause anxiety when thinking about meeting future expenses.
Family and inheritance can also be problematic. Most parents want to ensure their children are financially stable and receive a lasting inheritance. Fears about your children’s ability to manage their finances responsibly, or to have the right work ethic and motivation, are not uncommon, along with worries about family members who may not have the same financial resources.
These concerns can help to inform estate planning strategies, including trusts and other mechanisms to ensure that assets are distributed well.
Maintenance of social status.
Few of us wish to admit it but maintaining our social status can also be a contributing factor to financial stress. Many of us feel pressure to maintain social status by spending money on expensive goods and this can create a sense of competition and comparison, which can lead to feelings of inadequacy.
This is where it helps to get support to put your financial wellbeing front and centre of your financial plan. Exploring your attitude towards your social status is important so that you can let go of feelings of judgement where they don’t serve you. This is certainly easier said than done!
Managing financial anxiety.
First and foremost, speak to your Xentum financial planner who will help you work out your priorities and manage your finances effectively. We call it WealthPlan™, it’s our distinctly ‘you first, money second’ way of helping you to use your money to make the most of your life. Life is to be enjoyed, and it’s easier to do so when you have a plan and are in control.
Looking after your overall physical and emotional wellbeing is also important. Money is important to us all, and it’s easy to feel overwhelmed and stressed, whereas a calm and peaceful mind helps us to make better decisions.
Taking time to relax and think clearly is important, simply going for a walk can help but if it’s your thing then mindfulness and meditation can help. Mindfulness involves being present in the moment and observing your thoughts and feelings without judgement. This can help you develop a more balanced perspective on your financial situation and reduce feelings of anxiety and stress.
Thirdly, it can be helpful to set realistic goals and expectations for your financial situation. It is important to remember that financial security is not the same as financial freedom. If you enjoy a good income but still worried about your finances, a strong financial plan will help you find that elusive sense of freedom and truly begin to enjoy what you’ve worked hard to achieve.